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Direct-to-device: we’re faced with a $100-billion question

“Direct-to-device” communication in the context of satellite technology is a significant and evolving topic with a potentially substantial market impact. This communication approach involves sending data, content, or services directly to user devices, such as smartphones, without the need for intermediary ground-based infrastructure or additional user equipment. Here are some key points to consider regarding direct-to-device satellite communication:

  1. Market Potential: The direct-to-device satellite communication market holds immense potential, with estimates of its value reaching up to $100 billion. This potential is driven by various factors, including the growing demand for connectivity in remote or underserved areas, disaster response and recovery efforts, IoT applications, and more.
  2. Low Earth Orbit (LEO) Satellites: The rise of LEO satellite constellations, such as SpaceX and OneWeb, is a driving force behind the concept of direct-to-device communication. LEO satellites operate at lower altitudes, reducing latency and enabling direct communication with user devices.
  3. Reduced Latency: Direct-to-device communication via LEO satellites can significantly reduce latency compared to traditional geostationary satellites. This low-latency connectivity is essential for applications like online gaming, video conferencing, and real-time IoT data transmission.
  4. Global Coverage: Direct-to-device satellite networks aim to provide global coverage, extending connectivity to remote and rural areas that lack terrestrial infrastructure. This has the potential to bridge the digital divide and bring the benefits of the internet to underserved populations.
  5. Challenges: While direct-to-device satellite communication offers numerous advantages, it also comes with challenges. These include regulatory issues, spectrum management, satellite constellation deployment, cost-effectiveness, and competition with existing terrestrial networks.
  6. Emerging Applications: Beyond traditional internet access, direct-to-device satellite communication can support a wide range of applications, including disaster management, environmental monitoring, precision agriculture, and autonomous vehicles.
  7. Economic Impact: The success of direct-to-device satellite communication could have a substantial economic impact, fostering innovation, creating job opportunities, and stimulating economic growth in various sectors.

Therefore, direct-to-device satellite communication represents a significant shift in how we think about connectivity, with the potential to reshape industries, bridge connectivity gaps, and create new opportunities for businesses and individuals. However, its success depends on addressing technical, regulatory, and economic challenges while capitalizing on the advantages it offers in terms of global coverage and low latency.

The global satellite services market is poised for growth in the coming years, with expectations of its value increasing from $107 billion in 2022 to $123 billion by 2032, according to projections by Euroconsult. Key insights from this forecast include:

  1. Data Services Surge: Data services revenues are expected to experience significant growth, nearly tripling from $19 billion in 2022 to $53 billion in 2032. This surge is indicative of the increasing demand for data connectivity, driven by applications like IoT, data analytics, and global internet access.
  2. Video Demand Shift: In contrast, Euroconsult foresees a slight dip in video demand, with revenues decreasing by about 20 percent from $88 billion in 2022 to $70 billion in 2032. This shift may be attributed to changing consumer preferences, including the rise of streaming services and on-demand content.
  3. Competition and Ecosystem Changes: Despite the overall optimism, the satellite services market is expected to face turbulence due to intense competition and a rapidly evolving ecosystem. The dynamics of the industry are shifting, with the emergence of new satellite constellations and technologies, challenging the established players.
  4. Insurance Impact: Recent anomalies in geostationary orbit, such as issues with satellites like Arcturus, Inmarsat 6 F2, and Viasat-3 Americas, are expected to impact the insurance market. These incidents have raised concerns and could lead to higher insurance costs for satellite operators.

In summary, the satellite services market is poised for growth, driven by increasing demand for data connectivity services. However, the industry faces challenges, including competition, ecosystem changes, and insurance concerns, which could impact its trajectory in the coming years. Nonetheless, satellite technology continues to play a crucial role in global connectivity and data transmission.

Globalstar sees a jump in revenue which highlights IoT importance

Globalstar, the company responsible for Apple’s satellite-powered SOS application, reported a significant 50% rise in quarterly sales on August 3rd, attributed to promising growth in its business of connecting remote Internet of Things (IoT) devices.

Approximately half of Globalstar’s $55 million revenue during the quarter ending on June 30th was generated by wholesale capacity service revenues, largely driven by Apple. Apple has been utilizing Globalstar’s satellites since November for its iPhone emergency messaging feature.

In addition, the company’s commercial IoT segment contributed $9 million to the revenue, marking a 33% increase compared to the same period last year. Globalstar aims to expand this IoT business by introducing two-way services by the end of 2023. Currently, the IoT services are unidirectional, offering tracking and monitoring functions in regions with poor or no terrestrial network coverage. The integration of two-way capabilities would empower customers with command and control functionalities.

Apple is supporting Globalstar in launching 17 new satellites to enhance its low Earth orbit fleet. In exchange, Apple will have access to 85% of the satellite capacity for its emergency messaging requirements. The remaining 15% of capacity could potentially accommodate a substantial increase in commercial IoT subscribers, as indicated by B. Riley analyst Mike Crawford.

According to CEO David Kagan, Globalstar is confident about securing a substantial portion of the remaining satellite capacity, especially following the implementation of its two-way module.

Kagan stated that half of the required infrastructure for the two-way IoT service has been deployed across Globalstar’s gateways. The company is preparing to initiate beta services for select clients later this year.

Furthermore, Globalstar confirmed that its upcoming next-generation satellites are progressing as scheduled for launch in 2025. These launches adhere to the original agreements with MDA and Rocket Lab. The satellites are currently entering a critical design review phase, indicating steady progress in their development.

The supply chain challenges that previously caused delays in producing Globalstar’s legacy Spot GPS and messaging devices have been resolved by mid-April, as reported by Kagan during the earnings call.

Despite a 4% decrease in Spot service revenues for the second quarter of 2023, Kagan anticipates a surge in subscriber numbers throughout this year. Adjusted EBITDA witnessed a substantial 86% increase, reaching $27 million.

The company has revised its revenue expectations for 2023, now projecting a range between $200 million and $230 million. This represents a growth of 35% to 55% compared to 2022. The earlier guidance had indicated total sales between $185 million and $230 million for 2023. These estimates exclude potential revenue from Globalstar’s spectrum leasing for terrestrial use.

During the earnings call, Globalstar’s Executive Chair, James Monroe, expressed optimism about the adoption of devices capable of utilizing the company’s Band 53 frequencies. Monroe expects these devices to reach hundreds of millions by the same time next year, as Globalstar continues discussions with terrestrial partners and regulatory authorities worldwide.

Iridium unveils new satellite IoT Messaging Transport

Iridium Messaging Transport (IMT) is designed to simplify the development of satellite IoT services.

Iridium Communications Inc. recently announced the service introduction of IMTSM, a two-way cloud-native networked data service optimized for use over Iridium Certus® and programmed to make it easier to add satellite connections to existing or new IoT solutions.

IMT provides an IP data transport service unique to the Iridium® network, designed for small-to-moderate-sized messages supporting satellite IoT applications. Integrated with CloudConnect and Amazon Web Services (AWS), the new service can reduce development costs and speed time to market for new Iridium Connected® IoT devices. IMT has been highly anticipated by Iridium’s partner ecosystem and is currently available for the Iridium Certus 100 service with introduction on Iridium Certus 200, 350 and 700 planned for the first quarter of 2023.

As a connectionless messaging service for Iridium CertusTM modules, IMT aligns with current established server-device message constructs using hubs, Pub/Sub or queues, depending on application platforms. The IMT service can be used by a customer application that is ‘store and forward’ or has small amounts of data traffic that does not require a persistent connection between servers, utilizing an Iridium Certus terminal. Whether it’s machine-to-machine (M2M), e-mails, weather updates, transactions, or group communications, IMT enhances two-way messaging to and from anywhere in the world.

IMT is utilized with the Iridium CloudConnect model of server-side message processing, regardless of the underlying over-the-air and ground systems technologies and protocols. The Iridium CloudConnect service combines Iridium IoT capabilities with AWS cloud services extending customers’ IoT reach to the more than 85 percent of the earth that lacks terrestrial coverage. IMT utilizes industry-standard protocols and technology for managing and delivering messages in the cloud, including MQTT, HTTPS and WebSocket (WSS). This makes IMT an easier, faster, and less expensive protocol to develop with, supporting users with countless advantages to design applications that are scalable and easier to distribute to other platforms.

Among the first products built with IMT available are the RockREMOTE by Ground Control and STREAM+ by MetOcean Telematics. The RockREMOTE offers a reliable and flexible solution for industrial IoT applications including oil and gas, mining, utilities and renewables, and transport & cargo. It has a built-in MQTT application that allows developers to submit and receive data payloads across the MQTT protocol. Users can send and receive messages, pictures, to and from anywhere in the world utilizing this IMT implementation over the Iridium Certus 100 service.

STREAM+ allows users to send and receive files and messages securely. Designed for field applications with size, weight, and power constraints, STREAM+ offers a range of industry standard protocols, features, and inputs simplifying integration and installation for end users and reducing development costs and overall time to market.

Unique in the satellite industry, Iridium Certus is the only broadband service that provides reliable, weather-resilient connectivity for on-the-move internet, high-quality voice, email, live-action video and IoT data transfer. Through its constellation of crosslinked satellites in Low-Earth Orbit (LEO), Iridium is the only communications company that offers truly global coverage and is ideally suited for IoT applications.

After 5G NGSO Broadband Failures – What’s Next for Investors?

Photo: OneWeb.

After 5G NGSO Broadband Failures In our recent column, we proposed a golden triangle of competitive differentiation in the satcom industry, comprising advantageous configurations of orbit, spectrum and payload to host a subset of 5G satcom services within a unified “network of networks.”

With the LeoSat shutdown, and OneWeb and Intelsat recently filing for Chapter 11 bankruptcy protection, it seems timely to revisit that golden triangle and ask what it tells us about the future for 5G satcom investors.

While we didn’t see the writing on the wall for OneWeb, we were very clear that it would be difficult to be commercially successful in the NGSO consumer broadband market. Since then, OneWeb’s primary investor Softbank apparently concluded that making a success of the company’s combination of Ku- Ka-band spectrum and a NGSO orbit to deliver broadband services would have been a tough gig. Bearing in mind that the OneWeb event follows LeoSat investors reaching a similar conclusion towards the end of 2019, it will be fascinating to see what new ideas will emerge from prospective investors now circling around OneWeb’s Non-Geostationary Orbit (NGSO) assets.

Since our last column, Intelsat has also filed for Chapter 11, in a move clearly linked to maximizing the value of their C-band spectrum rights, and Ligado has been given a long-awaited go-ahead to rollout a 5G network incorporating hybrid terrestrial and GEO satellite services in L-band. These are significant developments that will help to shape the evolution of 5G convergence, but it is undoubtedly the case that satcom investors have taken a bumpy ride on the journey to 5G nirvana. The repurposing of incumbent spectrum rights is a hugely important part of the satcom 5G puzzle; possibly the most important element and certainly the primary battleground for today’s investors.

While OneWeb had set its sights on the broadband market, other NGSO operators developing Internet of Things (IoT) services in sub- 6 GHz spectrum have continued to meet recent funding goals, albeit at lower orders of magnitude. Perhaps, according to recent events, the prohibitive scale of investment required to build a Low-Earth Orbit (LEO) broadband service will cause NGSO investors to put sharper focus on the 5G IoT opportunity?

And once the dust settles over the question as to which orbit/spectrum configurations are most investable for the provision of 5G satellite broadband and IoT services, differentiated payload strategies will become the next axis of differentiation between competing operators. Only time will tell how many NGSO constellation are really needed to fulfill the needs of a unified, global 5G network of networks. But since there is not a one-size-fits-all solution to every 5G use case, it will be fascinating to continue speculating how this complex patchwork will finally be knitted together. After 5G NGSO Broadband Failures

Putting in place an open standards framework to support that complexity is no mean feat, and the 3GPP community still has its work cut out to maintain pace on the standardization effort for integrated Non-Terrestrial Networks (NTN) in Release 17 and Release 18. That task, somewhat inhibited by our current COVID-19 situation, must also be completed to drive returns to those investing in 5G space infrastructure. But standards alone are by nature undifferentiated, and it is pertinent for 5G network operators to ask how these standard protocols and waveforms can be leveraged to extract maximum value from their own variant of the golden triangle.

Just for now, let’s keep a watching brief on the OneWeb assets as a retesting of investment appetite for 5G NGSO broadband. Whatever the direction of travel of the industry from here on, and despite the current focus on satellite spectrum assets, it is important to bear in mind that a successful endgame must encompass all three pillars of the golden triangle (spectrum, orbit and payload). Even a small mismatch to market expectations can impair business cases and dominance in just one of the pillars will be insufficient for clinching the advantage.

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Link Communications Systems is a London based telecommunications service provider and technology integrator that specialises in VSAT network design, integration and services in remote regions throughout the world. LCS provides Internet via Satellite, Private Networks, Maritime, Television broadcasting and other services.

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